Will Sun, Microsoft Truce Impact EU Appeal?

Microsoft's decision to pay Sun Microsystems nearly $2 billion to resolve technology disputes will have a number of ramifications. But one of the most intriguing is whether it will affect Microsoft's EU appeal.

The payment ends Sun's patent and antitrust actions against the company, as well as its objections in the European Union, which led to the record $613 million fine against the Redmond, Wash., giant.

Joe Wilcox, an analyst at Jupiter Research (which is owned by this Web site's parent company, Jupitermedia Corp.), said that bears watching.

"Sun was the one that lobbied the EU to open the investigation," Wilcox said. "What was that about? It was about interoperability between other server software and Windows. Well, now we have an agreement; Sun's going to get access to information and that problem's solved, at least from the perspective of Sun."

"My question is, would Sun rally now on behalf of Microsoft in Europe? If that were to happen, what impact might that have during the appeals process?"

Scott McNealy, Sun chairman and CEO, hasn't said whether the company will take an active role in the EU dispute. In a statement, he did mention that the companies decision to partner will be good for consumers.

"This agreement launches a new relationship between Sun and Microsoft - a significant step forward that allows for cooperation while preserving customer choice," McNealy said. "Our companies will continue to compete hard, but this agreement creates a new basis for cooperation that will benefit the customers of both companies."

Legal issues aside, the new era of cooperation will lead to greater interoperability between the companies' technologies.

The companies signed a Technical Collaboration Agreement on server-based technologies. To start, Sun and Microsoft will work together on the communications protocols that underpin the Microsoft Active Directory and Sun Java System Identity Server.

The most immediate benefit is companies using the two servers in a company network, or connecting with a network up or down the supply chain, can manage and negotiate user identification, authentication and authorization. Sun also agreed
to sign a license under Microsoft's Communications Protocol Program, a term established in the wake of Microsoft's settlement with the Justice Department in 2002.

"There were issues in the U.S. courts about whether that program had been effective or not," Wilcox said. "Well, now Microsoft has a very high-profile customer -- not just a high-profile customer, but one that has historically been a bitter Microsoft rival. I think it will also help Microsoft in the enterprise. The largest companies tend to be more
heterogeneous, so Microsoft really needs to make sure that its server software works well with the stuff that's there already."

Another benefit of the agreement is it puts to rest the use of Microsoft's customized Java Virtual Machine (JVM), a years-long subject of debate between the two companies. Microsoft licensed the JVM technology from Sun in 1996, with the condition Microsoft's JVM be compatible with others; Microsoft altered the code and sparked a legal challenge in 1997. Microsoft lost on appeal and said it would not continue Java support in Windows XP and beyond, giving
customers until September to make the switch.

The technical agreement also extends to development on both sides with .NET and Java, programming platforms that have created almost religious customer feelings. The two agreed to improve the collaboration between the technologies going forward. J2EE
, the enterprise development platform based on Java, is popular with many developers but lags behind .NET
in programmer popularity.

"A lot of development with respect to Web services is either Java, .NET or both and so the interoperability between the technology will ensure better interoperability between the different Web services platforms, [which] will be good for Microsoft and Sun down the road," Wilcox said of the intended collaboration.

Proving that negotiations have been underway for some time, the
two companies today also announced Windows certification on Sun's line of
Xeon servers, with Opteron certification "moving forward," the
statement read.

Sun's Microsoft partnership was just one of several Sun announcements today, including the promotion of Jonathan Schwartz to COO and the layoff of 3,300 employees.

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